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Vienna - Iran faced Western pressure on Saturday to make
concessions over its atomic activities after it and six world powers failed to
meet a 20 July deadline for a deal to end the decade-old dispute but agreed to
keep talking.

The countries agreed to extend the high-stakes negotiations
by four months, and let Iran access another $2.8bn of its cash frozen abroad
during that period, though most sanctions on the Islamic Republic stayed in
place.

Germany - one of the major powers trying to persuade Iran to
curb its nuclear programme - warned that the extended talks might be the last
chance for a long time to reach a peaceful solution.

Some progress

Echoing the views of other envoys, a Western diplomat said
there had been some progress during nearly three weeks of marathon discussions
in Vienna's 19th century Coburg palace and that gaps in positions were not
"unbridgeable".

But, the senior diplomat added: "We cannot accept that
Iran stays at current levels of enrichment."

The six powers want Iran to significantly scale back its
uranium enrichment programme to make sure it cannot produce nuclear bombs. Iran
says the programme is entirely peaceful and wants sanctions that have severely
damaged its oil-dependent economy to be lifted as soon as possible.

After years of rising tension between Iran and the West and
fears of a new Middle East war, last year's election of a pragmatist, Hassan
Rouhani, as Iran's president led to a thaw in ties that resulted in the current
nuclear negotiations.

The announcement to give diplomacy until 24 November came in
the early hours of Saturday, a day before the 20 July deadline that Iran, the
United States, Britain, France, Germany, Russia and China had earlier set for
an agreement.

"These few months until November could be the last and
best chance for a long time to end the nuclear argument peacefully,"
German Foreign Minister Frank-Walter Steinmeier said.

"Iran must show it is willing to dispel all doubts
about the peaceful nature of its nuclear programme," he said.

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